Colorado

The Tax Cuts and Jobs Act, which was introduced on November 2 in the House of Representatives, includes some provisions that raise taxes and some that cut taxes, so the net effect for any particular family’s federal tax bill depends on their situation. Some of the provisions that benefit the middle class — like lower tax rates, an increased standard deduction, and a $300 tax credit for each adult in a household — are designed to expire or become less generous over time. Some of the provisions that benefit the wealthy, such as the reduction and eventual repeal of the estate…

This week a "historic" but highly problematic budget agreement was finally reached in Connecticut, Michigan lawmakers banned localities from taxing any food or beverages, and Nebraska and North Dakota both got unpleasant news about future revenues. Also see our "what we're reading" section for news on 11 states that have run up long-term fiscal deficits since 2002 and the impacts of flooding on local tax bases.

This week, Kansas's school funding was again ruled unconstitutionally low and unfair, while Montana lawmakers indicated they'd rather let historic wildfires burn a hole through their budget than raise revenues to meet their funding needs. Meanwhile, a struggling agricultural sector continues to cause problems for Iowa and Nebraska, but legalized recreational marijuana is bringing good economic news to both California and Nevada.

The “tax reform framework” released by the Trump administration and Congressional Republican leaders on September 27 would affect states differently, but every state would see its richest residents grow richer if it is enacted. In all but a handful of states, at least half of the tax cuts would flow to the richest one percent of residents if the framework took effect.

The “tax reform framework” released by the Trump administration and congressional Republican leaders on September 27 would not benefit everyone in Colorado equally. The richest one percent of Colorado residents would receive 59.3 percent of the tax cuts within the state under the framework in 2018. These households are projected to have an income of at least $637,800 next year. The framework would provide them an average tax cut of $86,480 in 2018, which would increase their income by an average of 4.7 percent.

The U.S. Census Bureau released its annual data on income, poverty and health insurance coverage this week. For the second consecutive year, the national poverty rate declined and the well-being of America’s most economically vulnerable has generally improved. In 2016, the year of the latest available data, 40.6 million (or nearly 1 in 8) Americans were living in poverty.

Astonishingly, tax policies in virtually every state make it harder for those living in poverty to make ends meet. When all the taxes imposed by state and local governments are taken into account, every state imposes higher effective tax rates on poor families than on the richest taxpayers.

This week, Pennsylvania lawmakers risk defaulting on payments due to their extremely overdue budget and Illinois legislators will borrow billions to start paying their backlog of unpaid bills. Governing delves into why there were more such budget impasses this year than in any year in recent memory. And Oklahoma got closure from its Supreme Court on whether closing special tax exemptions counts as "raising taxes" (it doesn't).

A tiny fraction of the U.S. population (one-half of one percent) earns more than $1 million annually. But in 2018 this elite group would receive 48.8 percent of the tax cuts proposed by the Trump administration. A much larger group, 44.6 percent of Americans, earn less than $45,000, but would receive just 4.4 percent of the tax cuts.

A tiny fraction of the Colorado population (0.4 percent) earns more than $1 million annually. But this elite group would receive 37.5 percent of the tax cuts that go to Colorado residents under the tax proposals from the Trump administration. A much larger group, 40.4 percent of the state, earns less than $45,000, but would receive just 4.1 percent of the tax cuts.

This week, Rhode Island lawmakers agreed on a budget, leaving only three states – Connecticut, Pennsylvania, and Wisconsin – without complete budgets. Texas, however, remains in special session and West Virginia could go back into another special session over tax issues. And in New York City, the mayor proposes a tax on the wealthy to […]

Budget deliberations continue in earnest this week in Alaska, Connecticut, Pennsylvania, and Rhode Island. In South Dakota and Utah, the focus is on gearing up for ballot initiative efforts to raise needed revenue, though be sure to read about legislators nullifying voter-approved initiatives in Maine and elsewhere in our "what we're reading" section.

While only a few states still remain mired in overtime budget debates, there is plenty of budget and tax news from around the country this week. Efforts are underway to repeal gas tax increases in California and challenge a local income tax in Seattle, Washington. And New Jersey legislators' law to modernize its tax code to tax Airbnb rentals has been vetoed for now.

Not only would President Trump’s proposed tax plan fail to deliver on its promise of largely helping middle-class taxpayers, it also would shower a disproportionate share of the total tax cut on taxpayers in some of the richest states while southern and a few other states would receive a smaller share of the tax cut […]

Earlier this year, the Trump administration released some broadly outlined proposals to overhaul the federal tax code. Households in Colorado would not benefit equally from these proposals. The richest one percent of the state’s taxpayers are projected to make an average income of $1,845,700 in 2018. They would receive 52.5 percent of the tax cuts that go to Colorado’s residents and would enjoy an average cut of $142,190 in 2018 alone.

The broadly outlined tax proposals released by the Trump administration would not benefit all taxpayers equally and they would not benefit all states equally either. Several states would receive a share of the total resulting tax cuts that is less than their share of the U.S. population. Of the dozen states receiving the least by this measure, seven are in the South. The others are New Mexico, Oregon, Maine, Idaho and Hawaii.

Supporters of creating a local personal income tax in Seattle are rightly concerned about the lopsided nature of their state’s tax code. In a 50-state study titled Who Pays?, produced using our microsimulation tax model, we found that Washington State’s tax system is the most regressive in the nation.

The trend is clear: states are experiencing a rapid decline in state corporate income tax revenue. Despite rebounding and even booming bottom lines for many corporations, this downward trend has become increasingly apparent in recent years. Since our last analysis of these data, in 2014, the state effective corporate tax rate paid by profitable Fortune 500 corporations has declined, dropping from 3.1 percent to 2.9 percent of their U.S. profits. A number of factors are driving this decline, including: a race to the bottom by states providing significant “incentives” for specific companies to relocate or stay put; blatant manipulation of…

This week, transportation funding debates finally concluded with gas tax updates in Indiana, Montana, and Tennessee, and appear to be nearing an end in South Carolina. Meanwhile, Louisiana and Oregon lawmakers debated new Gross Receipts Taxes, and Texas legislators considered eliminating the state’s franchise tax. — Meg Wiehe, ITEP Deputy Director, @megwiehe Louisiana Gov. Bel Edward’s Commercial Activities Tax (CAT) was pulled from committee early this week without a vote due to opposition, […]

This week in state tax news we saw a destructive tax cut effort defeated in Georgia, a state shutdown avoided in New York, and lawmakers hone in on major tax debates in Massachusetts, Nebraska, South Carolina, and WestVirginia. State efforts to collect taxes owed on online purchases continue to heat up as well. — Meg […]

In the Tax Justice Digest we recap the latest reports, blog posts, and analyses from Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Here’s a rundown of what we’ve been working on lately. Corporations Offshore Cash Hoard Grows to $2.6 Trillion U.S. corporations now hold a record $2.6 trillion offshore, a […]

While every state’s tax system is regressive, meaning lower income people pay a higher tax rate than the rich, some states aim to improve tax fairness through a state Earned Income Tax Credit (EITC). Federal lawmakers established the in 1975 to bolster the earnings of low-wage workers, especially workers with children and offset some of […]

The House GOP’s American Health Care Act is being pushed quickly through the legislative process, with a vote on the House floor scheduled for as early as Thursday. The Republican legislation seeks to pay for the cost of repealing highly progressive taxes enacted as part of the Affordable Care Act by making substantial cuts to […]

State tax debates have been very active this week. Efforts to eliminate the income tax continue in West Virginia. Policymakers in many states are responding to revenue shortfalls in very different ways: some in Iowa, Mississippi, and Nebraska seek to dig the hole even deeper with tax cuts, while the Missouri House’s response has been […]